24 April 2015: Highly Critical Report on Australia for Anti-Money Laundering Failures

The just-released assessment of Australia’s Anti-Money Laundering (AML) system by the international AML standard setter, the Financial Action Task Force (FATF) is highly critical of Australia.

Transparency International Australia said today “This country should move promptly from its present focus to showing that its AML system is fully effective.”

The report highlights a systemic failure to enforce our laws and thus encourages abuse of the financial system by criminals that leaves Australia unguarded against significant risk of continued inflow of illicit funds from sources in foreign countries – particularly corruption-related proceeds flowing into real estate from places like China and PNG.

The report notes that at no time has a corporation been prosecuted by AUSTRAC or any other authority for money laundering breaches in Australia.

The FATF notes a good grasp by Australia of AML risks, but also criticises us for the narrow focus of attention on what our authorities treat as just three predicate risks (drugs, fraud, and tax evasion) and on terrorist-related activity. The report specially notes:

  • That Australia remains at significant risk of an inflow of illicit funds from foreigners ‘who find Australia a suitable place to hold and invest funds, including in real estate’;
  • That real estate agents and legal professionals are still not subject to anti-money laundering controls or suspicious transaction reporting obligations, even though they are highlighted by Australian authorities as being high-risk for money laundering activities, and thus needs rapid attention;
  • That disappointingly, even domestic banks, which account for a large share of international funds transfers through which foreign corruption proceeds may be laundered, have not fully implemented preventive measures.

Transparency International Australia (TIA) believes a full overhaul of Australia’s stance to anti-money laundering is necessary now. 

The Executive Director of TIA, Michael Ahrens, says

 “We call on the government to immediately address all the recommendations by the FATF as a matter of priority to prevent Australia continuing to be used as an attractive haven for corruption proceeds from around the world.”

In particular, he said:

“The government should fully support the Chief Executive of AUSTRAC with reform of its policies and laws to require it to effectively enforce anti-money laundering laws and regulations. 

“As a first step, the government should make immediately clear which agency is responsible for the prosecution of corporate entities for money laundering offences since greater enforcement of anti-money laundering laws is called for”.

 

Media Liaison:

Michael Ahrens, Executive Director: 0411 360 209; Email tioz@transparency.org.au